Federal Research and Development Funding: FY2007

Publication Date: March 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Science and technology

Type:

Abstract:

On December 9, 2006, President Bush signed a continuing resolution, or CR (P.L. 109-383, H.J.Res. 102) which provides spending at FY2006 levels (through February 15, 2007) for those agencies lacking enacted FY2007 appropriations bills. The House has passed 10 of its 11 appropriations bills, and the Senate passed three of its 12 appropriations bills.

The Bush Administration had requested $137.7 billion in federal research and development (R&D) funding for FY2007. That sum represented a 2.4% increase over the estimated $134.5 billion that was approved in FY2006. As in the recent past, the FY2007 increase over the FY2006 estimated funding levels was due to significant funding increases in the Department of Defense (DOD) and the National Aeronautics and Space Administration's (NASA's) space vehicles development program.

The centerpiece of the President's proposed FY2007 R&D budget was the American Competitiveness Initiative (ACI). The President proposed this initiative in response to growing concerns about America's ability to compete in the technological global market place. Over the next 10 years, the $136 billion initiative would have committed $50 billion for research, science education, and the modernization of research infrastructure. The remaining $86 billion would have financed a revised permanent R&D tax incentive over the next 10 years. The most recent federal research tax credit expired on December 31, 2005. In his budget request, the President asked Congress to pass a permanent Research and Experimental Federal tax credit.

As part of the $50 billion for research, the President called for doubling federal R&D funding over10 years. That increase would have included the physical sciences and engineering research in three agencies: the National Science Foundation (NSF), the Department of Energy's (DOE's) Office of Science, and the National Institute of Standards and Technology (NIST). According to the Administration, in FY2007, the ACI overall funding increases for NSF, DOE, and NIST would have been $910 million, or 9.3% above FY2006 estimated funding levels for the three agencies.

Despite the ACI proposal, total federal basic research funding for FY2007 would have been flat at $28.2 billion (in real dollars). Five agencies accounted for 90% of all federal basic research expenditures in FY2006. Total federal research funding (the sum of basic and applied research) was projected to decline 2.6% in FY2007. That decline was due to a 6.6% drop in applied research funding. Some contend that a $1.8 billion decline in funding for applied research would have helped to pay for the ACI. The Department of Defense (P. L. 109-289) and the Department of Homeland Security (P .L. 109-295) are the only two agencies that have enacted FY2007 appropriations bills.